Keeping Costs Down While Raising Productivity: The challenge for manufacturing engineers

European manufacturers are estimated to spend over €400 Billion every year on maintenance activities. Studies show that typically 30% of failed machinery can be repaired at half the cost of buying replacements, which suggests a potential 15% saving. This article discusses the issues that stop manufacturers cutting costs and improving productivity – the essence of lean manufacturing.

Perhaps the first thing manufacturers should consider when addressing efficiency is keeping assets low. Manufacturers can easily eliminate excess inventory from their books, and thus get better return on net assets, simply by not purchasing the inventory until it’s needed. Methods of achieving this include Just in Time (JIT) inventory management, which is also sometimes called the Toyota Production System. Figures suggest this could result in a 60 billion saving in plants across Europe.

As a service and commissioning engineer, I’ve often turned up on site to help a customer with a breakdown, only to find a host of spares out of their antistatic packaging and a confused client, not knowing whether or not the spares were functional.

The best way to prevent that from happening is to correctly test and label working equipment as it goes into the stores. Knowing that the part is ready to go into your application when needed is crucial for both maintenance and production teams. The savings made this way can be significant.

However, no matter how good your inventory management, unnecessary downtime costs coupled with the price of the support engineer’s visit, may not be factored in when it comes to actual losses. Engineers must be the first ones to understand howimportant it is to keep plant downtime to a minimum. Research shows that manufacturers spend 40% of their time on reactive maintenance with little left to get to the root cause of the problem. The irony is that 60% of all preventative maintenance activities are actually unnecessary, so getting the right plan in place is a prerequisite.

Another question plant managers need to ask at this stage iswhether energy reduction is still a key initiative within their business plan. The majority of enterprises have already implemented the quick wins. Throughout the years we have seen many government schemes meant to support reductions in carbon emissions come and go, from replacing lighting or fixing leaks in air supplies through to fitting energy efficient motors and variable speed drives to pumps and fans,. Yet with paybacks becoming harder to achieve in less than two years, many plant managers seem to have put the issue to one side.

Perhaps this needs to be reconsidered? I believe that energy efficiency should remain an integral part of the long term business plan of every engineering company. This is particularly true in light of the crushing changes to the CRC Energy Efficiency Scheme (formerly Carbon Reduction Commitment), which now means large companies will be, almost literally, ‘taxed’ on their energy use.

For instance dynamic breaking resistors are often used in applications where companies could save significant amounts of energy over the years by fitting regeneration units to their variable speed drives.

Despite everything we have discussed, the increased need for budget cuts can put even the best manufacturing efficiency plans under pressure. However, if you place inventory management, energy management and knowledge management at the heart of your strategy, it is possible to both decrease expenditure and improve efficiency. And if every manufacturer did this, the €400 Billion spent on maintenance activities across Europe could very soon be reduced to a more tolerable figure.

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